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FRIEDMAN INDUSTRIES INC - Quarter Report: 2019 September (Form 10-Q)

frd20190930_10q.htm
 

 



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 


 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2019

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FROM THE TRANSITION PERIOD FROM                      TO                      

 

COMMISSION FILE NUMBER 1-7521

 


 

FRIEDMAN INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)

 


 

TEXAS

74-1504405

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

 

1121 JUDSON ROAD, SUITE 124, LONGVIEW, TEXAS 75601 

(Address of principal executive offices) (Zip Code)

 

(903758-3431

(Registrant’s telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $1 Par Value  

FRD

 

NYSE American

 


 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large accelerated filer

Accelerated filer

       

Non-accelerated filer

☒  

Smaller reporting company

       
   

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). (Check one):   Yes  ☐    No   ☒

 

At November 14, 2019, the number of shares outstanding of the issuer’s only class of stock was 6,999,444 shares of Common Stock.



 

 

 

 

 

TABLE OF CONTENTS

 

Part I — FINANCIAL INFORMATION

3

Item 1. Financial Statements

3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

11

Item 3. Quantitative and Qualitative Disclosures About Market Risk

14

Item 4. Controls and Procedures

14

Part II — OTHER INFORMATION

15

Item 6. Exhibits

15

SIGNATURES

16

 

2

 

 

 

 

Part I — FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

FRIEDMAN INDUSTRIES, INCORPORATED

 

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED

 

   

September 30, 2019

   

March 31, 2019

 

ASSETS

               

CURRENT ASSETS:

               

Cash

  $ 19,371,200     $ 11,667,161  

Accounts receivable, net of allowances for bad debts and cash discounts of $29,178 at September 30, 2019 and March 31, 2019

    12,886,816       13,183,411  

Inventories

    36,092,963       49,062,086  

Other

    1,008,063       543,549  

TOTAL CURRENT ASSETS

    69,359,042       74,456,207  

PROPERTY, PLANT AND EQUIPMENT:

               

Land

    1,452,799       1,452,799  

Buildings and yard improvements

    8,863,150       8,821,253  

Machinery and equipment

    38,930,853       38,176,497  

Less accumulated depreciation

    (37,154,964 )     (36,540,591 )
      12,091,838       11,909,958  

OTHER ASSETS:

               

Cash value of officers’ life insurance and other assets

    172,188       235,817  

Income taxes recoverable

    304,527        

TOTAL ASSETS

  $ 81,927,595     $ 86,601,982  

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

CURRENT LIABILITIES:

               

Accounts payable and accrued expenses

  $ 8,847,357     $ 11,577,664  

Income taxes payable

          159,694  

Dividends payable

    139,989       279,978  

Contribution to retirement plan

    150,750       50,250  

Employee compensation and related expenses

    371,410       297,316  

TOTAL CURRENT LIABILITIES

    9,509,506       12,364,902  

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

    94,438       210,257  

DEFERRED INCOME TAX LIABILITY

    1,426,277       1,545,246  

OTHER NON-CURRENT LIABILITIES

    18,658        

TOTAL LIABILITIES

    11,048,879       14,120,405  

COMMITMENTS AND CONTINGENCIES

               

STOCKHOLDERS’ EQUITY:

               

Common stock, par value $1:

               

Authorized shares — 10,000,000

               

Issued shares — 8,225,160 shares and 8,205,160 shares at September 30 and March 31, 2019, respectively

    8,225,160       8,205,160  

Additional paid-in capital

    29,468,944       29,322,472  

Treasury stock at cost (1,225,716 shares at September 30 and March 31, 2019)

    (5,525,964 )     (5,525,964 )

Retained earnings

    38,710,576       40,479,909  

TOTAL STOCKHOLDERS’ EQUITY

    70,878,716       72,481,577  

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

  $ 81,927,595     $ 86,601,982  

 

3

 

 

 

 

FRIEDMAN INDUSTRIES, INCORPORATED

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED

 

   

Three months ended
September 30,

   

Six months ended
September 30,

 
   

2019

   

2018

   

2019

   

2018

 

Net sales

  $ 39,995,580     $ 53,432,029     $ 80,970,900     $ 101,625,347  

Costs and expenses

                               

Costs of goods sold

    40,778,230       49,487,488       80,282,226       91,488,328  

General, selling and administrative costs

    1,253,849       1,289,438       2,462,237       2,782,178  

Interest expense

          15,753             15,753  
      42,032,079       50,792,679       82,744,463       94,286,259  

Interest and other income

    (4,370 )     (6,275 )     (10,705 )     (69,050 )

Earnings (loss) before income taxes

    (2,032,129 )     2,645,625       (1,762,858 )     7,408,138  

Provision for (benefit from) income taxes:

                               

Current

    (385,062 )     748,719       (294,524 )     1,815,175  

Deferred

    (102,930 )     (104,010 )     (118,969 )     (7,846 )
      (487,992 )     644,709       (413,493 )     1,807,329  

Net earnings (loss)

  $ (1,544,137 )   $ 2,000,916     $ (1,349,365 )   $ 5,600,809  

Weighted average number of common shares outstanding:

                               

Basic

    6,999,444       7,009,444       6,999,444       7,009,444  

Diluted

    6,999,444       7,009,444       6,999,444       7,009,444  

Net earnings (loss) per share:

                               

Basic

  $ (0.22 )   $ 0.29     $ (0.19 )   $ 0.80  

Diluted

  $ (0.22 )   $ 0.29     $ (0.19 )   $ 0.80  

Cash dividends declared per common share

  $ 0.02     $ 0.06     $ 0.06     $ 0.09  

 

4

 

 

 

 

FRIEDMAN INDUSTRIES, INCORPORATED

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

 

   

Six Months Ended
September 30,

 
   

2019

   

2018

 

OPERATING ACTIVITIES

               

Net earnings (loss)

  $ (1,349,365 )   $ 5,600,809  

Adjustments to reconcile net earnings (loss) to cash provided by operating activities:

               

Depreciation

    614,373       715,192  

Deferred taxes

    (118,969 )     (7,846 )

Compensation expense for restricted stock

    166,472       144,480  

Change in postretirement benefits

    5,477       14,861  
Lower of cost or net realizable value inventory adjustment     955,605        

Decrease (increase) in operating assets:

               

Accounts receivable, net

    296,595       7,629  

Inventories

    12,013,518       (9,317,746 )

Income taxes recoverable

    (304,527 )      

Other assets, current and non-current

    (513,442 )     (635,701 )

Increase (decrease) in operating liabilities:

               

Accounts payable and accrued expenses

    (2,730,307 )     2,574,885  

Income taxes payable

    (159,694 )     913,139  

Contribution to retirement plan

    100,500       90,000  

Employee compensation and related expenses

    74,094       87,529  

Other non-current liabilities

    18,658        

NET CASH PROVIDED BY OPERATING ACTIVITIES

    9,068,988       187,231  

INVESTING ACTIVITIES

               

Purchase of property, plant and equipment

    (796,253 )     (205,652 )

Increase in cash surrender value of officers’ life insurance

    (8,740 )     (12,550 )

NET CASH USED IN INVESTING ACTIVITIES

    (804,993 )     (218,202 )

FINANCING ACTIVITIES

               

Cash dividends paid

    (559,956 )     (350,472 )

NET CASH USED IN FINANCING ACTIVITIES

    (559,956 )     (350,472 )

INCREASE (DECREASE) IN CASH

    7,704,039       (381,443 )

Cash at beginning of period

    11,667,161       4,052,582  

CASH AT END OF PERIOD

  $ 19,371,200     $ 3,671,139  

 

5

 

 

 

FRIEDMAN INDUSTRIES, INCORPORATED

 

CONDENSED NOTES TO QUARTERLY REPORT — UNAUDITED

 

 

NOTE A

— BASIS OF PRESENTATION

 

The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes of Friedman Industries, Incorporated (the “Company”) included in its annual report on Form 10-K for the year ended March 31, 2019.

 

 

NOTE B

— NEW ACCOUNTING STANDARDS

 

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 establishes a new lease accounting standard that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months.  Leases with a term of 12 months or less will be accounted for similar to prior guidance for operating leases. In July 2018, the FASB issued Accounting Standards Update No. 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new standard. In July 2018, the FASB also issued Accounting Standards Update No. 2018-11, Leases (Topic 842): Targeted Improvements, to give entities another option for transition and to provide practical expedients to reduce the cost and complexity of implementing the new standard. ASU 2016-02 and all subsequently issued amendments, collectively "ASC 842," is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

 

The Company adopted ASC 842 on April 1, 2019 using the optional transition method under which the new standard is applied only to the most current period presented and the cumulative effect of applying the new standard to existing lease agreements is recognized at the date of initial application. The adoption of ASC 842 resulted in the recording of right-of-use lease assets and lease liabilities of approximately $63,000. The Company implemented the appropriate changes to business processes and controls to support recognition and disclosure under the new standard, including the new qualitative and quantitative disclosures. The Company also elected the package of transition practical expedients related to lease identification, lease classification, and initial direct costs. In addition, the Company made the following accounting policy elections: (1) the Company will not separate lease and non-lease components by class of underlying asset and (2) the Company will apply the short-term lease exemption by class of underlying asset. The adoption of this standard did not have an impact on the Company’s consolidated statement of operations or cash flows and did not result in a cumulative adjustment to retained earnings. See Note E – Leases for additional information.

 

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires, among other things, the use of a new current expected credit loss ("CECL") model in order to determine the allowance for doubtful accounts with respect to accounts receivable. The CECL model requires estimation of lifetime expected credit loss with respect to receivables and recognition of allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. Subsequently, in November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (ASC 326), which clarifies that impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases. The new guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.

 

 

NOTE C

— INVENTORIES

 

Inventories consist of prime coil, non-standard coil and tubular materials. Prime coil inventory consists primarily of raw materials, non-standard coil inventory consists primarily of raw materials and tubular inventory consists of both raw materials and finished goods. Cost for prime coil inventory is determined using the average cost method. Cost for non-standard coil inventory is determined using the specific identification method. Cost for tubular inventory is determined using the average cost method. All inventories are valued at the lower of cost or net realizable value. At September 30, 2019, tubular finished goods inventory was written down $955,605 to lower the carrying value to net realizable value.

 

A summary of inventory values by product group follows:

 

   

September 30, 2019

   

March 31, 2019

 

Prime Coil Inventory

  $ 17,206,839     $ 26,240,439  

Non-Standard Coil Inventory

    2,603,190       2,078,008  

Tubular Raw Material

    4,380,136       4,418,750  

Tubular Finished Goods

    11,902,798       16,324,889  
    $ 36,092,963     $ 49,062,086  

 

6

 

 

Tubular raw material inventory consists of hot-rolled steel coils that the Company will manufacture into pipe. Tubular finished goods inventory consists of pipe the Company has manufactured and new mill reject pipe that the Company purchases from U.S. Steel Tubular Products, Inc.

 

 

NOTE D

— DEBT

 

On December 12, 2018, the Company entered into a loan agreement for a $5,000,000 revolving line of credit facility (the “Credit Facility”) with Citizens National Bank, which changed its name to VeraBank on January 14, 2019 (the “Bank”). The Credit Facility expires on December 12, 2019 and is collateralized by the Company’s tubular segment accounts receivable and inventory. Borrowings under the credit facility bear interest at the Bank’s prime rate minus 0.55% resulting in an applicable interest rate of 4.45% as of September 30, 2019. Interest payments on amounts advanced are due monthly and principal payments may be made at any time without penalty. All outstanding principal and accrued interest is due upon expiration of the Credit Facility. Access to funds under the Credit Facility is subject to a borrowing base requirement. The borrowing base is calculated as 80% of eligible tubular segment accounts receivable plus 40% of eligible tubular segment inventory. The total amount contributed to the borrowing base by eligible inventory shall not exceed $3,000,000. The Credit Facility contains financial covenants that require the Company to not permit: (1) total shareholders’ equity to be less than $50.0 million at any time, (2) total liabilities to exceed 50% of total shareholders’ equity at any time and (3) debt service coverage ratio, measured as of the end of each calendar quarter, to be less than 2.00 to 1.00. The debt service coverage ratio is calculated on a trailing twelve month period as the ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to the sum of interest expense for such period, scheduled principal payments for such period on all indebtedness for money borrowed and capital leases, and the aggregate amount payable during such period under any operating leases. At September 30, 2019, the borrowing base calculation would allow the Company access to approximately $4,988,000 under the Credit Facility; however, the Company was in violation of the debt service coverage ratio covenant. The covenant violation constitutes an event of default which would prohibit the Company from accessing funds unless the Bank waives the covenant violation. The Company did not obtain a waiver of the violation from the Bank due to the Company having no borrowings during or subsequent to the September 30, 2019 quarter and no anticipated need for funds through the expiration date of the Credit Facility.

 

 

NOTE E

— LEASES

 

In February 2016, the FASB issued ASU 2016-02, Leases (“ASC 842”), to require lessees to recognize most leases on the balance sheet, while recognition on the statement of operations would be substantially unchanged. The new standard requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use (“ROU”) asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing and potential uncertainty of cash flows related to leases. Leases with a term of 12 months or less will be accounted for similar to prior guidance for operating leases. In July 2018, the FASB issued Accounting Standards Update No. 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new standard. In July 2018, the FASB also issued Accounting Standards Update No. 2018-11, Leases (Topic 842): Targeted Improvements, to give entities another option for transition and to provide practical expedients to reduce the cost and complexity of implementing the new standard. ASU 2016-02 and all subsequently issued amendments, collectively "ASC 842," is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

 

The Company adopted ASC 842 on April 1, 2019 using the optional transition method under which the new standard is applied only to the most current period presented and the cumulative effect of applying the new standard to existing lease agreements is recognized at the date of initial application. Under this adoption method, reporting periods beginning after April 1, 2019 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. The adoption of ASC 842 resulted in the recording of initial ROU asset and lease liabilities of approximately $63,000 at April 1, 2019. The Company also elected the package of transition practical expedients related to lease identification, lease classification, and initial direct costs. In addition, the Company made the following accounting policy elections: (1) the Company will not separate lease and non-lease components by class of underlying asset and (2) the Company will apply the short-term lease exemption by class of underlying asset. The adoption of this standard did not have an impact on the Company’s consolidated statement of operations or cash flows and did not result in a cumulative adjustment to retained earnings.

 

The Company’s lease of its office space in Longview, Texas is the only operating lease included in the ROU asset and lease liability. The lease calls for monthly rent payments of $2,728 and expires on April 30, 2021. The Company’s other operating leases for items such as IT equipment and storage space are either short-term in nature or immaterial. The Company did not have any finance leases as of September 30, 2019.

 

7

 

 

The components of lease expense were as follows for the three months and six months ended September 30, 2019:

 

   

Three Months Ended

September 30, 2019

   

Six Months Ended

September 30, 2019

 

Operating lease expense

  $ 8,184     $ 16,368  

 

Rental expense for operating leases classified under the previous accounting standard, Accounting Standards Codification Topic 840, for the three and six months ended September 30, 2018 was $8,184 and $16,368, respectively.

 

The following table illustrates the balance sheet classification for ROU assets and lease liabilities as of September 30, 2019:

 

   

September 30, 2019

 

Balance Sheet Classification

Assets

         

Operating lease right-of-use asset

  $ 48,928  

Other assets

Total operating lease right-of-use asset

  $ 48,928    

Liabilities

         

Operating lease liability, current

  $ 30,270  

Accrued expenses

Operating lease liability, non-current

    18,658  

Other non-current liabilities

Total operating lease liability

  $ 48,928    

 

Other supplemental operating lease information consists of the following:

 

Weighted average remaining lease life (years)

    1.6  

Weighted average discount rate

    7 %

 

Maturities of operating lease liabilities as of September 30, 2019 were as follows:

 

Fiscal 2020 (remainder of fiscal year)

  $ 16,368  

Fiscal 2021

    32,736  

Fiscal 2022

    2,728  

Fiscal 2023

     

Fiscal 2024

     

Total undiscounted lease payments

  $ 51,832  

Less: imputed interest

    (2,904 )

Present value of lease liability

  $ 48,928  

 

 

NOTE F

— STOCK BASED COMPENSATION

 

The Company maintains the Friedman Industries, Incorporated 2016 Restricted Stock Plan (the “Plan”). The Plan is administered by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) and continues indefinitely until terminated by the Board or until all shares allowed by the Plan have been awarded and earned. The aggregate number of shares of the Company’s Common Stock eligible for award under the Plan is 500,000 shares. Subject to the terms and provisions of the Plan, the Committee may, from time to time, select the employees, directors or consultants to whom awards will be granted and shall determine the amount and applicable restrictions of each award. Forfeitures are accounted for upon their occurrence.

 

The following table summarizes the activity related to restricted stock awards for the six months ended September 30, 2019:

 

   

Number of Shares

   

Weighted Average

Grant Date Fair

Value Per Share

 

Unvested at March 31, 2019

    180,000     $ 7.03  

Cancelled or forfeited

           

Granted

    20,000       7.62  

Vested

           

Unvested at September 30, 2019

    200,000     $ 7.09  

 

Of the 200,000 unvested shares at September 30, 2019, 160,000 shares have five year cliff vesting restrictions with vesting occurring on January 4, 2022, 20,000 shares have two year cliff vesting restrictions with vesting occurring on March 13, 2021 and 20,000 shares have five year cliff vesting restrictions with vesting occurring on April 1, 2024. Compensation expense is recognized over the requisite service period applicable to each award. The Company recorded compensation expense of $166,472 and $144,480 in six months ended September 30, 2019 and 2018, respectively, relating to the stock awards issued under the Plan.

 

8

 

 

 

NOTE G

— SEGMENT INFORMATION (in thousands)

 

   

Three Months Ended
September 30,

   

Six Months Ended
September 30,

 
   

2019

   

2018

   

2019

   

2018

 

Net sales

                               

Coil

  $ 28,421     $ 34,828     $ 56,602     $ 65,957  

Tubular

    11,575       18,604       24,369       35,668  

Total net sales

  $ 39,996     $ 53,432     $ 80,971     $ 101,625  

Operating profit (loss)

                               

Coil

  $ 324     $ 1,925     $ 668     $ 5,103  

Tubular

    (1,746 )     1,376       (1,201 )     3,698  

Total operating profit (loss)

    (1,422 )     3,301       (533 )     8,801  

Corporate expenses

    614       661       1,241       1,462  

Interest & other income

    (4 )     (6 )     (11 )     (69 )

Total earnings (loss) before taxes

  $ (2,032 )   $ 2,646     $ (1,763 )   $ 7,408  

 

   

September 30,
2019

   

March 31,

2019

 

Segment assets

               

Coil

  $ 34,633     $ 43,104  

Tubular

    27,371       31,520  
      62,004       74,624  

Corporate assets

    19,924       11,978  
    $ 81,928     $ 86,602  

 

Corporate expenses reflect general and administrative expenses not directly associated with segment operations and consist primarily of corporate executive and accounting salaries, professional fees and services, bad debts, retirement plan contribution expense, corporate insurance expenses and office supplies. Corporate assets consist primarily of cash, the cash value of officers’ life insurance and income taxes recoverable.

 

 

NOTE H

— REVENUE

 

Revenue is generated primarily from contracts to manufacture or process steel products. Most of the Company’s revenue is generated by sales of material out of the Company’s inventory but a portion of the Company’s revenue is derived from processing of customer owned material. Generally, the Company’s performance obligations are satisfied, control of our products is transferred, and revenue is recognized at a single point in time, when title transfers to our customer for product shipped or when services are provided. Revenues are recorded net of any sales incentives. Shipping and other transportation costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Costs related to obtaining sales contracts are incidental and expensed when incurred. Because customers are invoiced at the time title transfers and the Company’s rights to consideration are unconditional at that time, the Company does not maintain contract asset balances. Additionally, the Company does not maintain contract liability balances, as performance obligations are satisfied prior to customer payment for product. The Company offers industry standard payment terms.

 

9

 

 

The Company has two reportable segments: Coil and Tubular. Coil primarily generates revenue from temper passing and cutting to length hot-rolled steel coils. Coil segment revenue consists of three main product types: Prime Coil, Non-Standard Coil and Customer Owned Coil. Tubular primarily generates revenue from the manufacture, distribution and processing of steel pipe. Tubular segment revenue consists of three main product or service types: Manufactured Pipe, Mill Reject Pipe and Pipe Finishing Services. The following table disaggregates our revenue by product for each of our reportable business segments for the three and six month periods ended September 30, 2019 and 2018, respectively:

 

   

Three Months Ended September 30,

   

Six Months Ended September 30,

 
   

2019

   

2018

   

2019

   

2018

 

Coil Segment:

                               

Prime Coil

    24,936,635       29,575,814       49,165,088       54,351,845  

Non-standard Coil

    3,271,453       4,894,421       7,043,968       11,004,879  

Customer Owned Coil

    212,521       358,209       393,021       600,920  
      28,420,609       34,828,444       56,602,077       65,957,644  

Tubular Segment:

                               

Manufactured Pipe

    9,744,189       14,214,209       20,476,676       25,169,596  

Mill Reject Pipe

    1,830,782       4,306,980       3,892,147       9,727,841  

Pipe Finishing Services

    -       82,396       -       770,266  
      11,574,971       18,603,585       24,368,823       35,667,703  

 

 

NOTE I

— STOCKHOLDERS’ EQUITY

 

The following tables reflect the changes in stockholders’ equity for each quarterly period within the six months ended September 30, 2019 and September 30, 2018:

 

   

Common
Stock

   

Additional
Paid-In
Capital

   

Treasury
Stock

   

Retained
Earnings

 

BALANCE AT MARCH 31, 2019

  $ 8,205,160     $ 29,322,472     $ (5,525,964 )   $ 40,479,909  

Net earnings

                      194,772  

Issuance of restricted stock

    20,000                    

Paid in capital – restricted stock awards

          63,236              

Cash dividends ($0.04 per share)

                      (279,978 )

BALANCE AT JUNE 30, 2019

  $ 8,225,160     $ 29,385,708     $ (5,525,964 )   $ 40,394,703  

Net loss

                      (1,544,137 )

Paid in capital – restricted stock awards

          83,236              

Cash dividends ($0.02 per share)

                      (139,990 )

BALANCE AT SEPTEMBER 30, 2019

  $ 8,225,160     $ 29,468,944     $ (5,525,964 )   $ 38,710,576  

 

   

Common
Stock

   

Additional
Paid-In
Capital

   

Treasury
Stock

   

Retained
Earnings

 

BALANCE AT MARCH 31, 2018

  $ 8,185,160     $ 29,154,874     $ (5,475,964 )   $ 36,711,380  

Net earnings

                      3,599,893  

Paid in capital – restricted stock awards

          72,240              

Cash dividends ($0.03 per share)

                      (210,283 )

BALANCE AT JUNE 30, 2018

  $ 8,185,160     $ 29,227,114     $ (5,475,964 )   $ 40,100,990  

Net earnings

                      2,000,916  

Paid in capital – restricted stock awards

          72,240              

Cash dividends ($0.06 per share)

                      (420,567 )

BALANCE AT SEPTEMBER 30, 2018

  $ 8,185,160     $ 29,299,354     $ (5,475,964 )   $ 41,681,339  

 

 

NOTE J

— SUPPLEMENTAL CASH FLOW INFORMATION

 

The Company paid income taxes of approximately $245,000 and $721,000 in the six months ended September 30, 2019 and 2018, respectively. The Company paid no interest in the six months ended September 30, 2019. The Company paid interest of $15,753 in the six months ended September 30, 2018. In the six months ended September 30, 2019, there were noncash transactions totaling approximately $121,000 for the transfer of ownership of life insurance policies from the Company to officers upon their retirement.

 

10

 

 

 

NOTE K

— INCOME TAXES

 

For the six months ended September 30, 2019, the Company recorded an income tax benefit of $413,493, or 23.5% of pre-tax loss, compared to an income tax provision of $1,807,329, or 24.4% of pre-tax income, for the six months ended September 30, 2018. For both six month periods, the effective tax rate differed from the federal statutory rate due primarily to the inclusion of state tax expenses or benefits in the calculation.

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

Friedman Industries, Incorporated is a manufacturer and processor of steel products and operates in two reportable segments; coil products and tubular products.

 

The coil product segment includes the operation of two hot-roll coil processing facilities; one in Hickman, Arkansas and the other in Decatur, Alabama. Each facility operates a temper mill and a cut-to-length line. The temper mill improves the flatness and surface qualities of the coils and the cut-to-length line levels the steel and cuts the coils into sheet and plate of prescribed lengths. Combined, the facilities are capable of cutting sheet and plate with thicknesses ranging from 14 gauge to ½” thick. The coil product segment sells its prime grade inventory under the Friedman Industries name but also maintains an inventory of non-standard coil products, consisting primarily of mill secondary and excess prime coils, which are sold through the Company’s XSCP division. The coil product segment also processes customer-owned coils on a fee basis.

 

The tubular product segment consists of the Company’s Texas Tubular Products division (“TTP”) located in Lone Star, Texas. TTP operates two electric resistance welded pipe mills with a combined outside diameter (“OD”) size range of 2 3/8” OD to 8 5/8” OD. Both pipe mills are American Petroleum Institute (“API”) licensed to manufacture line pipe and oil country pipe and also manufacture pipe for structural purposes that meets other recognized industry standards. TTP has an API licensed pipe finishing facility that threads and couples oil country tubular goods and performs other services that are customary in the pipe finishing process. TTP’s inventory consists of raw materials and finished goods. Raw material inventory consists of hot-rolled steel coils that TTP will manufacture into pipe. Finished goods inventory consists of pipe TTP has manufactured and new mill reject pipe that TTP purchases from U.S. Steel Tubular Products, Inc.

 

Results of Operations

 

Six Months Ended September 30, 2019 Compared to Six Months Ended September 30, 2018

 

During the six months ended September 30, 2019, sales, costs of goods sold and gross profit decreased $20,654,447, $11,206,102 and $9,448,345, respectively, from the comparable amounts recorded during the six months ended September 30, 2018. The decrease in sales was related to both a decline in tons sold and a decrease in the average per ton selling price. Tons sold decreased approximately 10% from approximately 124,000 tons in the 2018 period to approximately 112,000 tons in the 2019 period. Discussion of the change in sales is expanded upon at the segment level in the following paragraphs. Gross profit as a percentage of sales decreased from approximately 10.0% in the 2018 period to approximately 1.0% in the 2019 period.

 

Our operating results are significantly impacted by the market price of hot-rolled steel coil. Results for the 2019 period were negatively impacted by a declining steel price while the 2018 period was positively impacted by an increasing steel price. In March 2018, the Administration of the U.S. government announced trade actions under Section 232 of the Trade Expansion Act related to imports of steel and aluminum products. In November 2017, steel prices began to rise on speculation of potential trade actions. The rising prices gained momentum in January 2018 when the Commerce Department’s recommendations were provided to the Administration. From January 2018, steel prices continued to rise approximately 40% until reaching a peak in July 2018. Prices held near a 10 year high until September 2018 when prices started to decline and continued that downward trend through September 2019, dropping approximately 42%. In the 2018 period, the six months immediately following the enactment of the Section 232 trade actions, our operations benefitted from strong margins primarily related to pricing power due to strong customer demand and the benefits of a cheaper inventory stock in a period of increasing prices. In the 2019 period, margins were challenged by the continued decline in steel prices and softer demand.

 

11

 

 

Coil Segment

 

Coil product segment sales for the 2019 period totaled $56,602,077 compared to $65,957,644 for the 2018 period, representing a sales decrease of $9,355,567 or approximately 14%. For a more complete understanding of the average selling prices of goods sold, it is helpful to isolate sales generated from processing of customer owned material and sales generated from coil segment inventory. Sales generated from processing of customer owned material totaled $393,021 for the 2019 period compared to $600,920 for the 2018 period. Sales generated from coil segment inventory totaled $56,209,056 for the 2019 period compared to $65,356,724 for the 2018 period. The decrease in coil segment sales was driven by a decrease in the average selling price per ton of material from inventory. The average per ton selling price related to these shipments decreased from approximately $883 per ton in the 2018 period to approximately $695 per ton in the 2019 period. The average selling price decline was partially offset by an increase in the volume of shipments. Inventory tons sold increased from approximately 74,000 tons in the 2018 period to approximately 81,000 tons in the 2019 period. Coil segment operations recorded operating profits of approximately $668,000 and $5,103,000 in the 2019 and 2018 periods, respectively.

 

Margins for the 2019 period were negatively impacted by continued decline in hot-rolled steel prices and the effect of inventory with higher average costs flowing through cost of goods sold. Margins for the 2018 period were positively impacted by increasing hot-rolled steel prices and the effect of inventory with lower average costs flowing through cost of goods sold. While sales volume for the 2019 period increased compared to the 2018 period, we believe the underlying demand was more challenging in the 2019 period compared to the 2018 period. Sales volume improved due primarily to the number of customers sold increasing from 127 in the 2018 period to 148 in the 2019 period.

 

The Company’s coil segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.

 

Tubular Segment

 

Tubular product segment sales for the 2019 period totaled $24,368,823 compared to $35,667,703 for the 2018 period, representing a sales decrease of $11,298,880 or approximately 32%. For a more complete understanding of the average selling prices of goods sold, it is helpful to isolate sales generated from the finishing of customer owned pipe and sales generated from tubular segment inventory. The Company did not generate any sales from the finishing of customer owned pipe during the 2019 period but generated sales of $770,266 for the 2018 period related to these services. Sales generated from tubular segment inventory totaled $24,368,823 for the 2019 period compared to $34,897,437 for the 2018 period. Tons sold decreased from approximately 50,000 tons in the 2018 period to approximately 31,000 tons in the 2019 period. The average per ton selling price related to these shipments increased from approximately $697 per ton in the 2018 period to approximately $787 per ton in the 2019 period. Tubular segment operations recorded an operating loss of approximately $1,201,000 in the 2019 period and an operating profit of approximately $3,698,000 in the 2018 period.

 

Operating results for the 2019 period were negatively impacted by an inventory write down of $955,605 at September 30, 2019 related to certain items of the segment’s manufactured pipe inventory. The inventory write down was due primarily to the persistent decline of hot-rolled steel prices and soft demand resulting in slower inventory turnover. Throughout the 2019 period, the segment experienced compressed margins associated with the declining steel prices and softness in the U.S. energy industry. In contrast, the 2018 period was positively impacted by strong margins associated with increasing steel prices and a stronger U.S. energy market. The average selling price for the tubular segment increased in the 2019 period due to a shift in the segment’s sales mix between mill reject pipe and the Company’s manufactured pipe. The average selling price associated with the Company’s manufactured pipe is much greater than the average selling price associated with mill reject pipe. Shipments of mill reject pipe decreased from approximately 27,500 tons in the 2018 period to approximately 10,000 tons in the 2019 period. The higher shipping volume of mill reject pipe in the 2018 period was due primarily to a strategic effort to reduce the level of mill reject pipe inventory. At September 30, 2019, mill reject pipe inventory was at a desired level. Shipments of manufactured pipe for the periods were comparable with approximately 21,000 tons in the 2019 period and 22,500 tons in the 2018 period.

 

The Company’s tubular segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.

 

General, Selling and Administrative Costs

 

During the 2019 period, general, selling and administrative costs decreased $319,941 compared to the 2018 period. This decrease was related primarily to decreases in bonuses associated with the decreased earnings.

 

Income Taxes

 

Income taxes in the 2019 period decreased $2,220,822 from the amount recorded in the 2018 period. This decrease was related primarily to the decrease in earnings before taxes for the 2019 period compared to the 2018 period.

 

Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018

 

During the three months ended September 30, 2019 (the “2019 quarter”), sales, costs of goods sold and gross profit decreased $13,436,449, $8,709,258 and $4,727,191, respectively, compared to the amounts recorded during the three months ended September 30, 2018 (the “2018 quarter”). The decrease in sales was related to both a decline in tons sold and a decrease in the average per ton selling price. Tons sold decreased approximately 8% from approximately 63,500 tons in the 2018 quarter to approximately 58,500 tons in the 2019 quarter. Discussion of the change in sales is expanded upon at the segment level in the following paragraphs. Gross margin as a percentage of sales decreased from a profit margin of approximately 7.4% in the 2018 quarter to a loss margin of approximately 2.0% in the 2019 quarter.

 

12

 

 

Coil Segment

 

Coil product segment sales for the 2019 quarter totaled $28,420,609 compared to $34,828,444 for the 2018 quarter, representing a sales decrease of $6,407,835 or approximately 18%. For a more complete understanding of the average selling prices of goods sold, it is helpful to isolate sales generated from processing of customer owned material and sales generated from coil segment inventory. Sales generated from processing of customer owned material totaled $212,521 for the 2019 quarter compared to $358,209 for the 2018 quarter. Sales generated from coil segment inventory totaled $28,208,088 for the 2019 quarter compared to $34,470,235 for the 2018 quarter. Inventory tons sold increased from approximately 38,000 tons in the 2018 quarter to approximately 43,000 tons in the 2019 quarter. The average per ton selling price related to these shipments decreased from approximately $912 per ton in the 2018 quarter to approximately $653 per ton in the 2019 quarter. Coil segment operations recorded operating profits of approximately $324,000 and $1,925,000 for the 2019 and 2018 quarters, respectively.

 

Margins for the 2019 quarter were negatively impacted by continued decline in hot-rolled steel prices and the effect of inventory with higher average costs flowing through cost of goods sold. Margins for the 2018 quarter were positively impacted by increasing hot-rolled steel prices and the effect of inventory with lower average costs flowing through cost of goods sold. While sales volume for the 2019 quarter increased compared to the 2018 quarter, we believe the underlying demand was more challenging in the 2019 quarter compared to the 2018 quarter. Sales volume improved due primarily to the number of customers sold increasing from 100 in the 2018 quarter to 120 in the 2019 quarter.

 

The Company’s coil segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.

 

Tubular Segment

 

Tubular product segment sales for the 2019 quarter totaled $11,574,971 compared to $18,603,585 for the 2018 quarter, representing a sales decrease of $7,028,614 or approximately 38%. For a more complete understanding of the average selling prices of goods sold, it is helpful to isolate sales generated from the finishing of customer owned pipe and sales generated from tubular segment inventory. The Company did not generate any sales from the finishing of customer owned pipe during the 2019 quarter but generated sales of $82,396 for the 2018 quarter related to these services. Sales generated from tubular segment inventory totaled $11,574,971 for the 2019 quarter compared to $18,521,189 for the 2018 quarter. Tons sold decreased from approximately 25,500 tons in the 2018 quarter to approximately 15,500 tons in the 2019 quarter. The average per ton selling price related to these shipments increased from approximately $722 per ton in the 2018 quarter to approximately $755 per ton in the 2019 quarter. Tubular segment operations recorded an operating loss of approximately $1,746,000 in the 2019 quarter and an operating profit of approximately $1,376,000 in the 2018 quarter.

 

Operating results for the 2019 quarter were negatively impacted by an inventory write down of $955,605 at September 30, 2019 related to certain items of the segment’s manufactured pipe inventory. The inventory write down was due primarily to the persistent decline of hot-rolled steel prices and soft demand resulting in slower inventory turnover. Throughout the 2019 quarter, the segment experienced compressed margins associated with the declining steel prices and softness in the U.S. energy industry. In contrast, the 2018 quarter was positively impacted by strong margins associated with increasing steel prices and a stronger U.S. energy market. The average selling price for the tubular segment increased in the 2019 quarter due to a shift in the segment’s sales mix between mill reject pipe and the Company’s manufactured pipe. The average selling price associated with the Company’s manufactured pipe is much greater than the average selling price associated with mill reject pipe. Shipments of mill reject pipe decreased from approximately 13,000 tons in the 2018 quarter to approximately 5,000 tons in the 2019 quarter. The higher shipping volume of mill reject pipe in the 2018 quarter was due primarily to a strategic effort to reduce the level of mill reject pipe inventory. At September 30, 2019, mill reject pipe inventory was at a desired level. Shipments of manufactured pipe declined from approximately 12,500 tons in the 2018 quarter to approximately 10,500 tons in the 2019 quarter.

 

The Company’s tubular segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.

 

Income Taxes

 

Income taxes in the 2019 quarter decreased $1,132,701 from the amount recorded in the 2018 quarter. This decrease was related primarily to the decrease in earnings before taxes for the 2019 quarter compared to the 2018 quarter.

 

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES 

 

We believe that the Company remained in a strong, liquid position at September 30, 2019. The current ratio was 7.3 at September 30, 2019 and 6.0 at March 31, 2019. Working capital was $59,849,536 at September 30, 2019 and $62,091,305 at March 31, 2019.

 

At September 30, 2019, the Company maintained assets and liabilities at levels it believed were commensurate with operations. Changes in balance sheet amounts occurred in the ordinary course of business. Cash increased primarily as a result of a reduction in inventory levels partially offset by purchases of property, plant and equipment and the payment of cash dividends. The Company expects to continue to monitor, evaluate and manage balance sheet components depending on changes in market conditions and the Company’s operations.

 

13

 

 

On December 12, 2018, the Company entered into a loan agreement for a $5,000,000 revolving line of credit facility (the “Credit Facility”) that expires December 12, 2019. Access to funds under the Credit Facility is subject to a borrowing base requirement. The borrowing base is calculated as 80% of eligible tubular segment accounts receivable plus 40% of eligible tubular segment inventory. The total amount contributed to the borrowing base by eligible inventory shall not exceed $3,000,000. At September 30, 2019, the borrowing base calculation would allow the Company access to approximately $4,988,000 under the Credit Facility; however, the Company was in violation of the debt service coverage ratio covenant. The covenant violation constitutes an event of default which would prohibit the Company from accessing funds unless the Bank waives the covenant violation. The Company did not obtain a waiver of the violation from the Bank due to the Company having no borrowings during or subsequent to the September 30, 2019 quarter and no anticipated need for funds through the expiration date of the Credit Facility.

 

The Company believes that its current cash position along with cash flows from operations and borrowing capability due to its financial position are adequate to fund its expected cash requirements for the next 24 months.

 

CRITICAL ACCOUNTING POLICIES

 

The preparation of consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Significant estimates that are subject to the Company’s assumptions include the determination of useful lives for fixed assets, determination of the allowance for doubtful accounts and the determination of net realizable value relative to inventory. The determination of useful lives for depreciation of fixed assets requires the Company to make assumptions regarding the future productivity of the Company’s fixed assets. The allowance for doubtful accounts requires the Company to draw conclusions on the future collectability of the Company’s accounts receivable. The determination of net realizable value when reviewing inventory value requires the Company to makes assumptions concerning sales trends, customer demand and steel industry market conditions. Actual results could differ from these estimates.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

From time to time, the Company may make certain statements that contain forward-looking information (as defined in the Private Securities Litigation Reform Act of 1996, as amended) and that involve risk and uncertainty. Such statements may include those risks disclosed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this report. These forward-looking statements may include, but are not limited to, future changes in the Company’s financial condition or results of operations, future production capacity, product quality and proposed expansion plans. Forward-looking statements may be made by management orally or in writing including, but not limited to, this Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the Company’s Annual Report on Form 10-K and its other Quarterly Reports on Form 10-Q. Forward looking statements include those preceded by, followed by or including the words “will,” “expect,” “intended,” “anticipated,” “believe,” “project,” “forecast,” “propose,” “plan,” “estimate,” “enable,” and similar expressions, including, for example, statements about our business strategy, our industry, our future profitability, growth in the industry sectors we serve, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions, and estimates and projections of future activity and trends in the oil and natural gas industry. These forward-looking statements are not guarantees of future performance. These statements are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Although forward-looking statements reflect our current beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Actual results and trends in the future may differ materially depending on a variety of factors including, but not limited to, changes in the demand for and prices of the Company’s products, changes in government policy regarding steel, changes in the demand for steel and steel products in general, the Company’s success in executing its internal operating plans, changes in and availability of raw materials, our ability to satisfy our take or pay obligations under certain supply agreements, unplanned shutdowns of our production facilities due to equipment failures or other issues, increased competition from alternative materials and risks concerning innovation, new technologies, products and increasing customer requirements. Accordingly, undue reliance should not be placed on our forward looking statements. We undertake no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent law requires.

 

Item

3. Quantitative and Qualitative Disclosures About Market Risk

 

Not required.

 

Item

4. Controls and Procedures

 

The Company’s management, with the participation of the Company’s principal executive officer (“CEO”) and principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act), as of the end of the fiscal quarter ended September 30, 2019. Based on this evaluation, the Company’s CEO and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the fiscal quarter ended September 30, 2019 to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the CEO and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

There were no changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

14

 

 

FRIEDMAN INDUSTRIES, INCORPORATED

Three Months Ended September 30, 2019

 

Part II

— OTHER INFORMATION

 

Item 6.

Exhibits

 

Exhibits

 

 

     

  3.1

Articles of Incorporation of the Company, as amended (incorporated by reference from Exhibit 3.1 to the Company’s Form S-8 filed on December 21, 2016).

     

  3.2

Articles of Amendment to the Articles of Incorporation of the Company, as filed with the Texas Secretary of State on September 22, 1987 (incorporated by reference from Exhibit 3.1 to the Company’s Form S-8 filed on December 21, 2016).

     

  3.3

Amended and Restated Bylaws of the Company (incorporated by reference from Exhibit 3.2 to the Company’s Form S-8 filed on December 21, 2016).

     

  31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Michael J. Taylor.

     

  31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Alex LaRue.

     

  32.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Michael J. Taylor.

     

  32.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Alex LaRue.

     

101.INS

XBRL Instance Document.

     

101.SCH

XBRL Taxonomy Schema Document.

     

101.CAL

XBRL Calculation Linkbase Document.

     

101.DEF

XBRL Definition Linkbase Document.

     

101.LAB

XBRL Label Linkbase Document.

     

101.PRE

XBRL Presentation Linkbase Document.

 

15

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

FRIEDMAN INDUSTRIES, INCORPORATED

       

Date: November 14, 2019

 

 

 

 

 

By

/s/ ALEX LARUE

 

 

 

Alex LaRue, Chief Financial Officer – 

      Secretary and Treasurer (Principal Financial Officer)

 

 

 

16